Attracting the right form of talent isn't a piece of cake (though it may sound like one), especially when you're looking forward to hiring for specific niche roles. With different models of recruitment services available, you might be wondering, what's the scoop? Which model do you trust the most? Now, recruitment agencies have always been there to help companies find suitable candidates and hire for hard-to-fill roles. However, as a hiring manager, if you've got a bunch of niche roles that demand specific skill sets or exceptional expertise, retained search should be your go-to option.
In our previous article, we had simplified contingency recruitment for you. In this article, we will solely discuss and focus on the retained recruitment model (a type of executive search).
What Is Retained Executive Search?
Retained recruiting is often named retained executive search and is given to agencies that have been approached by the company directly. They also work on a contractual basis rather than a transactional one. They are hired especially to fill up senior or executive positions, which is why they get to work very closely with the senior managers and officers of the company.
Most of the senior positions that retained search firms hire for are highly confidential and discreet. This is not something that a company's in-house team can be assigned with. Therefore, the need of retained and executive search firms.
Now take a look at this example– imagine a company wants to hire for the role of a CTO and is looking for a candidate who has graduated from Harvard. It's impossible for in-house recruiters and contingency search firms to look out for such niche candidates on LinkedIn, Glassdoor or Monster. This is where executive search firms or retained search firms enter. Most of these candidates whom they target are passive and are not looking for a new job.
How Do Retained Executive Search Firms Work?
- In this model, your client will negotiate the fees with you firsthand and pay you a portion of it up-front and not after the whole process of recruiting is over.
- Your agency should usually charge about 25% of the starting salary of the position they are recruiting for and might later include more bonuses and commissions that need to be fulfilled by their client if they agree to it. Sometimes the amount is also paid in 3 stages— 30% on signing the contract, 30% when an offer is made, and the remaining 40% when the candidate joins.
- Since this search is mostly conducted in executive firms, the companies that will be outsourcing will ask you to look for candidates to fill up positions for very senior roles, such as CEO, vice presidents, executives or sometimes even board members.
6 Stages You Need To Know About Retained Search
1. The Firm Works Harder To Find The Best Talent
As a retained recruitment agency, your primary focus should always prioritise quality over quantity. Don't rush into the process. It is crucial to have a pre-determined pace that both you and your client agree upon to scan and shortlist candidates as fast as you can without racing. The firm works harder towards finding the best possible candidate, regardless if he/she is actively looking for a new job. Since the search is more personalised and consultative, they are paid over the course of engagement and not on placements.
Did you know?
The market size of the executive search industry has increased considerably between 2012 and 2020. Last year alone, the global executive search industry was estimated to be worth 18 billion euros, eight billion euros more than in 2012!
2. More Secure & Discreet
It is a much more secure form of recruitment for the agency because their fees are not dependent on a limited or contingent time period. Companies also know that if they hire a consultant from a retained recruitment agency, then they can have someone who's entirely focused and not worry about other competitors in the same business as them.
In these cases, a partnership occurs between the agency and the client before the recruiter begins to scan and shortlist candidates using an Applicant Tracking System (ATS). Since agencies based on this model don't engage with multiple clients at once, it also helps them build a sense of mutual trust and a stronger connection for any future business deals or contractual agreements.
Pro Tip: Recruit CRM helps recruiters balance and maintain proper candidate and client relationships, sort candidate databases, helps in sourcing candidates, invoice management, advanced search, innumerable integrations and so on. You can sign up for a free trial to check it out for your retained recruiting agency.
3. The Search Fee Is More
When you are a recruitment consultant, it's a part of your job to shortlist the fittest candidate and give your client the best service possible, which is why thorough screening and scanning needs to be done. Thus, the retained search fee is a bit more than the contingency search. Moreover, dedicated engagement with any retained search firm is an investment from the client's end. When clients are guaranteed the best candidates and exclusivity, it might result in a long-term partnership.
4. The Concept Of 'Uptick'
Uptick is something that retained searchers should intimate their clients about. It's an idea that the hired search firms will try to find the most expensive candidates for a bigger payout. We have already mentioned earlier that any retained search firm accepts payments incrementally. The retainer that you're typically collecting from your clients initially is a basic fee. The final payments depend upon several factors, such as the project, the placement, and the first-year cash compensation that the executive will receive. While this is variable, it's certainly less than the lump sum that clients pay for contingency recruitment.
In short, clients benefit from executive retained searches because they put their efforts towards finding the best candidates and not expensive ones. If you find a client concerned about 'uptick', show them the retainer way.
5. A Personalised Approach
Unlike contingent search assignments, where one recruiter deals with many candidates at a given time and is often only focused on filling up the vacancies as soon as possible, the retained recruitment model helps build a stronger and more personal relationship with the candidate. It results in the recruiter actively conducting meetings and spending time with the candidate while getting to know them through one-on-one interactions.
Although the whole process can be very tiresome and can take a long time to complete, it is essential to point out that great things take time, so either you wait or settle for less.
6. Understand The Hiring Stages
Before all of the above comes to reality, you've got to understand the various hiring stages and the first of the lot being— finding work. First, you have to find clients to work for. No matter how amazing your candidate database is, you'll run out of business pretty soon if you don't have a proper outreach strategy in place. The next stage is winning the work once you find it, research extensively and gauge a candidate's ability properly. Finally, once you've searched effectively, you enter the decision-making phase, where you'll have to conduct face-to-face interviews during which the clients will decide whom to hire.
Once the offer has been made, it's time to close the search, evaluate how the search went and make sure your clients and candidates are happy. Again, validating relationships at this stage is crucial.
No doubt, retained search is expensive. It not just requires higher skills but also great coordination. Reach out to us to find out more about retained recruiting, it's benefits and how you can use Recruit CRM to make the most out of your executive recruiting journey!